Updated TARP Cheat Sheet

Last Updated: February 16, 2009 The Program Formerly Known as TARP: General Information Sponsor: U.S. Treasury Announced Programs: Capital Purchase Program (see cheat sheets for public and private programs) Asset Guarantee Program Targeted Investment Program Systemically Significant Failing Institutions Program Automotive Industry Financing Program Consumer Lending Facility (see TALF cheat sheet) Programs under Financial Stability Plan (see Financial Stability Plan cheat sheet) Key Dates Established: October 3, 2008 Duration: December 31, 2009 (or Extension Date: October 3, 2010) TARP Tracker Notes Authorized Amount $700.0 billion Capital Purchase Program -$250.0 billion Expenditure under the program expected to be less than $250 billion AIG Bailout II -$40.0 billion TALF -$200.0 billion Original allocation $20 billion, raised to $200 billion under Financial Stability Plan Automotive Industry Financing Program -$24.9.0 billion Includes $4 billion for Chrysler, $1.5 billion for Chrysler consumer lending program, $5 billion for GMAC, $1 billion loan for GM to invest in GMAC, $13.4 billion in commitments to GM ($4 billion pending report due Feb 17, 2009) Does not include any amounts reserved for Ford, if required Citigroup -$25.0 billion Does not include the guarantee against losses on a pool of assets. Treasury and FDIC to guarantee losses Bank of America -$20.0 billion Does not include the guarantee against losses on a pool of assets. Treasury and FDIC to guarantee losses Foreclosure Program -$50.0 billion $50 billion for Financial Stability Plan is expected to come from TARP funds Amount Remaining: $90.1 billion Who Can Participate? U.S. institutions subject to U.S. regulation (includes, at least, banks, savings associations, credit unions, security brokers or dealers and insurance companies) U.S. branches of foreign financial institutions with significant U.S. operations should qualify Institutions owned by foreign governments or central banks excluded with limited exception See “Programs” above -definitions are expanding as necessary to include Automotive Industry What are Troubled Assets? Residential or commercial mortgages and any securities, obligations or other instruments based on, or related to, such mortgages Originated or issued on or before March 14, 2008 and acquisition promotes financial market stability Other financial instruments if, after consultation with Fed, Treasury makes a written determination that the purchase is necessary to promote financial market stability and provides such determination to Congress No Congressional approval required Equity Investments – Key Terms Public companies must provide equity securities (warrants for non-voting common or preferred stock or warrants for voting common stock) Private companies may provide a warrant for common or preferred stock, or senior debt If voting, Treasury will agree not to exercise voting rights, other than class voting rights on matters that could adversely affect the shares If Treasury sells warrant, voting rights transfer to purchaser Warrants must contain standard anti-dilution provisions Warrants must protect Treasury if financial institution no longer public Treasury Considerations: Protecting Americans’ retirement savings Impact on public instrumentalities (ex: cities, counties) Preventing the unjust enrichment of participating financial institutions, including by preventing the sale of a troubled asset at a higher price than the seller paid for it Executive Compensation and Corporate Governance Applies to senior executive officers (CEO, CFO, top three compensated officers) Direct purchases certification by compensation committee of no incentive structure for excessive risk taking compensation committee meetings with senior risk officers annually no golden parachute payments for involuntary termination, receivership or bankruptcy claw-back for bonus/incentive payments made based on statements made during investment period later found to be materially inaccurate deductibility of compensation capped at $500,000 principal executive officer certification 120 days after investment and annually Indirect purchases (auctions): if exceed $300 million, no new employment contract that provides a golden parachute for involuntary termination, receivership or bankruptcy Additional Rules: Treasury has announced stricter rules for companies receiving “exceptional assistance” after Feb 4, 2009 Stimulus package will impose new rules retroactively: More executives will be covered by rules Bonuses for top executives limited to 50% of salary (unclear if this includes restricted stock) The Program Formerly Known as TARP: General Information Sponsor: U.S. Treasury Key Dates Announced Programs: Capital Purchase Program (see cheat sheets for public and private programs) Established: October 3, 2008 Asset Guarantee Program Targeted Investment Program Duration: December 31, 2009 Systemically Significant Failing Institutions Program (or Extension Date: October 3, 2010) Automotive Industry Financing Program Consumer Lending Facility (see TALF cheat sheet) Programs under Financial Stability Plan (see Financial Stability Plan cheat sheet) TARP Tracker Notes Authorized Amount $700.0 billion Capital Purchase Program -$250.0 billion Expenditure under the program expected to be less than $250 billion AIG Bailout II -$40.0 billion TALF -$200.0 billion Original allocation $20 billion, raised to $200 billion under Financial Stability Plan Automotive Industry -$24.9.0 billion Includes $4 billion for Chrysler, $1.5 billion for Chrysler consumer lending program, Financing Program $5 billion for GMAC, $1 billion loan for GM to invest in GMAC, $13.4 billion in commitments to GM ($4 billion pending report due Feb 17, 2009) Does not include any amounts reserved for Ford, if required Citigroup -$25.0 billion Does not include the guarantee against losses on a pool of assets. Treasury and FDIC to guarantee losses Bank of America -$20.0 billion Does not include the guarantee against losses on a pool of assets. Treasury and FDIC to guarantee losses Foreclosure Program -$50.0 billion $50 billion for Financial Stability Plan is expected to come from TARP funds Amount Remaining: $90.1 billion Who Can Participate? What are Troubled Assets? U.S. institutions subject to U.S. regulation (includes, at least, Residential or commercial mortgages and any securities, obligations or banks, savings associations, credit unions, security brokers or other instruments based on, or related to, such mortgages dealers and insurance companies) Originated or issued on or before March 14, 2008 and acquisition U.S. branches of foreign financial institutions with significant promotes financial market stability U.S. operations should qualify Other financial instruments if, after consultation with Fed, Treasury Institutions owned by foreign governments or central banks makes a written determination that the purchase is necessary to promote excluded with limited exception financial market stability and provides such determination to Congress See “Programs” above -definitions are expanding as necessary to No Congressional approval required include Automotive Industry Equity Investments -Key Terms Treasury Considerations: Public companies must provide equity securities (warrants for non-voting common or preferred Protecting Americans’ retirement savings stock or warrants for voting common stock) Impact on public instrumentalities (ex: Private companies may provide a warrant for common or preferred stock, or senior debt cities, counties) If voting, Treasury will agree not to exercise voting rights, other than class voting rights on Preventing the unjust enrichment of matters that could adversely affect the shares participating financial institutions, If Treasury sells warrant, voting rights transfer to purchaser including by preventing the sale of a Warrants must contain standard anti-dilution provisions troubled asset at a higher price than the Warrants must protect Treasury if financial institution no longer public seller paid for it Executive Compensation and Corporate Governance Applies to senior executive officers (CEO, CFO, top three compensated officers) Direct purchases certification by compensation committee of no incentive structure for excessive risk taking compensation committee meetings with senior risk officers annually no golden parachute payments for involuntary termination, receivership or bankruptcy claw-back for bonus/incentive payments made based on statements made during investment period later found to be materially inaccurate deductibility of compensation capped at $500,000 principal executive officer certification 120 days after investment and annually Indirect purchases (auctions): if exceed $300 million, no new employment contract that provides a golden parachute for involuntary termination, receivership or bankruptcy Additional Rules: Treasury has announced stricter rules for companies receiving “exceptional assistance” after Feb 4, 2009 Stimulus package will impose new rules retroactively: More executives will be covered by rules Bonuses for top executives limited to 50% of salary (unclear if this includes restricted stock) Last Updated: February 16, 2009 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=fefb5038-dde7-4e8b-a1a0-471d55d7dbfe

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